Restoring the Carbon Balance- Session 3: Policies …...Biochar, bio-pesticides, bio-cosmetics Chemicals Preservatives (formic acid) Medicinal Antifreeze (ethylene glycol) Carbon black

Restoring the Carbon Balance- Session 3: Policies and Financing May 11th, 2017 1

# #carbonbalance, 2016

Edward Saltzberg, Ph.D.Managing Director

Security & Sustainability Forum

Andy Revkin

Senior Reporter ProPublica

1

http://asulightworks.com/


Restoring the Carbon Balance Series

December 15, 2016 - Webinar 1: The Imperative

February 1, 2017 - Webinar 2: The Technologies

May 11, 2017 - Webinar 3: Policies, Financing, Regulations

June 8, 2017 - Webinar 4: How Sustainable is Our Climate Ethos?Register at www.ssfonline.org

1. Follow “Restoring the Carbon Balance” at

www.lightspeedsolutions.org

Register, Watch Recordings, Access Collateral Material

2. Participate in the RCB Discussions

Join: Restoring the Carbon Balance LinkedIn Group

http://www.ssfonline.org/

http://www.lightspeedsolutions.org/

https://www.linkedin.com/groups/6957500



Agenda

Introduction: Andy Revkin, ProPublica

Presentations:

Klaus Lackner, Arizona State University

Fatima Ahmad, Center for Climate and Energy Solutions

Noah Deich, Center for Carbon Renewal

Richard Mattison, CEO of Trucost

Discussion Moderated by Andy Revkin

Audience Q&A: Use the box in the go to Webinar window

Summary

Download Today’s Slides From the Window

(Please Take the Brief Exit Survey)

Moderator

Andy Revkin is the senior reporter for climate and related

issues at ProPublica. He joined the Independent public-interest

newsroom in December 2016, after 21 years of writing for The

New York Times. Andy began writing on climate change in the

1980s. He has won most of the top awards in science

journalism, along with a Guggenheim Fellowship, Columbia

University’s John Chancellor Award for sustained journalistic

excellence and an Investigative Reporters & Editors Award.

https://www.propublica.org/site/author/andrew_revkin

Panelists

Klaus Lackner, Director of Arizona State University’s Center for Negative Climate Emissions and Professor at the School of Sustainable Engineering

Fatima Ahmad, Fatima Maria Ahmad is a Solutions Fellow at the Center for Climate and Energy Solutions (C2ES) where she co-leads the National Enhanced Oil Recovery Initiative with the Great Plains Institute

Noah Deich, co-founder at the Center for Carbon Removal and a former management consultant on clean energy and corporate sustainability projects for large companies across North America

Richard Mattison, CEO of Trucost and a member of the EU Sustainable Finance High Level Expert Group and the Global Advisory Council of the Oxford Smith School Stranded Assets Program

Carbon Negative Scenarios for the FutureKlaus S Lackner

May 2017

[email protected]

@ Klaus_Lackner

Business as usual will lead to economic collapse

Constant rate of CO2 dumping will drive CO2 levels to 650 ppm by 2100

• Fossil fuel consumption results in CO2 dumping

• Economic growth drives continued rise in emissions

• Fossil fuels are likely to stay plentiful and cheap

CO2 dumping is not sustainable, economically not viable, potentially

catastrophic

• High level of warming leads to ocean rise, crop failures, ecosystem collapse

• Ocean acidification will cause failure of coral reefs by making carbonate formation difficult

• Warming will release carbon in methane hydrates, amplifying warming

• Potential for a global existential crisis

Business as usual is not an option

Need to take back the “empties”

7

Transition to carbon management

Carbon management is a form of waste management

Reduce – Reuse – Restore

• Mitigation reduces and reuses carbon – not sufficient to solve the problem

• Waste management adds disposal/restoration

Decarbonizatio

n

Energy efficiency

Renewables

Biomass

Nuclear?

Progress, but

Not Fast Enough

Not Large Enough

Increasingly

Necessary

Adaptation

Managing impacts

of climate change

Ocean rise, crop

losses, …

Market Driven

Approach

Capture & Use

Transforming CO2

into valuable

products.

Fuels, feedstocks

Waste

Disposal

Paradigm

Capture & Storage

Restoring C-balance

through long-term

sequestration

Pulling CO2

back from

the air

Graphics adapted from CO2 Initiative

8

Reduce, Reuse, Restore

Reduce

• Efficiency and conservation reduce emissions, tempered by economic and population growth

• Replace fossil energy sources, even though they tempt through low cost

Reuse

• Making fuels from CO2 through biomass or directly from point sources, the air or the ocean

• Large parts of the carbon cycle can only close through the environment

• Air planes, ships and heavy trucks continue to emit, past emissions are already out there

Restore

• Excess CO2 is collected and stored safely and permanently

• In underground reservoirs, in mineral carbonates, in long-lived infrastructure, in natural carbon reservoirs

• Excess matches fossil carbon extraction, creates negative emissions

• Need for certifying negative emissions

A tipping fee for disposal creates a carbon price for reduction and reuse

For every ton of carbon taken from the ground another

needs to be returned

9

Many different pathways to negative carbon

Agriculture and forestry for carbon dioxide removal

• Photosynthetic binding of carbon with subsequent use or storage

Technical approaches to carbon extraction from the environment

• Absorption from the air, extraction from ocean water

Disposal of carbon in natural and man-made reservoirs

• Soil carbon, biomass carbon, underground pore space, mineralization

Reuse in useful materials

• Fuels, plastics, carbon composites, carbonates

• Only fuels are large enough to match emissions

• Past emissions and future fossil fuel use will require large scale storage

All pathways require carbon removal and storage

10

One possible scenario:Deep penetration of solar photovoltaics energy

PV is beginning to undercut fossil electricity costs whenever the sun shines

• Levelized cost of PV is dropping below the marginal cost of coal and gas power plants

• Intermittency is now the problem of the competitor

• Deeper PV penetration is limited by the lack of storage – fighting the duck curve

Deep market penetration is enabled by on-site fuel production

• Direct air capture and electrolysis add flexible consumption for ”reverse combustion”

• Excess electricity goes into hydrogen and liquid fuel production– air capture provides the CO2

Large solar farms will include much smaller mechanical tree farms

• Providing CO2 for fuel production without pipelines

• Nearly all point sources are replaced with electric power

• Much of transportation runs on liquid fuels

• Electricity is backed up by super capacitors, batteries, hydrogen, liquid fuel

• Storage medium depends on cycle time – storage in excess of one day belongs to liquid fuels

The deserts of the world could easily support the world’s power and fuel demand,

but just closing the carbon cycle leaves excess carbon in the air

11

Managing waste carbon dioxide

The world is dumping CO2 into a single sink – Cleanup can happen anywhere

• Atmosphere/ocean/biosphere – direct air capture, ocean extraction, biomass capture

• Balancing past and current fossil fuel consumption

Establishing safe, certifiable carbon sinks

• CO2 storage may need to exceed 20th century emissions

Need to convince the public that storage is legitimate, safe and permanent

• Must go beyond offsets, true removal, accepting responsibility for long-term storage

Sewage and garbage made the transition more than a century ago

For every ton of carbon taken from the ground another

needs to be returned

12

A future world with carbon waste management

Demand for carbon cleanup will create waste management businesses

• Volunteer efforts and regulation will result in buying back carbon

The price of carbon cleanup will motivate reuse

• Creates a strong link to renewable energy to produce carbon-neutral fuels

Efforts need to be large to cope with 40 Gt CO2 annually

• However, still smaller than the scale for transitioning to renewable energy infrastructures

• How to finance a trillion dollar industry?

Like all waste management, balancing carbon will require regulations

• Regulations can learn from past experience (requirements, certification, etc.)

• Sewage and garbage removal started with volunteers

• Recycling of waste started with volunteers

Voluntary buy-back of carbon requires trust in the results

Volunteers demonstrate feasibility and bring costs down

Regulations protect climate

CO2

recapture

+$0.50

13

Policies and Financing: Current Opportunities to Accelerate Carbon Capture

Deployment

Fatima Maria Ahmad

C2ES Solutions Fellow

May 11, 2017

Agenda

2

• About C2ES

• National Enhanced Oil Recovery Initiative (NEORI)

• Federal and State Policy Opportunities

• Financing Through Innovative Business Models

•Independent, nonpartisan, nonprofit organization

•Mission: To forge practical solutions to reduce greenhouse gas emissions, expand clean energy, and strengthen resilience to climate impacts.

•A key objective is a national market-based program to reduce emissions cost-effectively.

•Brings city, state, and national policymakers together with businesses and other stakeholders.

•Ranks regularly among the top environmental think tanks in the world.

About Center for Climate and Energy Solutions

16

Business Environmental Leadership Council (BELC)

17

Carbon Capture is an Essential Technology

18

• IEA Analysis: CCS can provide 13% of cumulative emissions reductions needed by 2050.

Climate Benefits of Carbon Capture

19

• IPCC Analysis: More than 1/2 of the models failed to limit warming to 2C without CCS. For those that could, costs rose 138%.

• It is the only practical solution to achieve deep decarbonization in the industrial sector (18% of U.S. CO2 emissions).

Photo by U.S. Department of Energy

Lifecycle Analysis of CO2-EOR

20

• Clean Air Task Force analysis

• Net storage benefit of 0.19 metric tons of CO2 per barrel of oil produced (includes emissions from the oil).

• EOR using power plant CO2 results in a 63% net reduction of the total injected volume of CO2 or a 37% reduction in the life cycle emissions from oil.

• Negative Emissions: Bioenergy with Carbon Capture and Storage (BECCS)

• First step is carbon capture on ethanol plants - ADM (2017)

Coal Producers• Arch Coal• Cloud Peak Energy• Peabody Energy

Electric Power Generators• Great River Energy• NRG Energy• Summit Power Group• Tenaska Energy

Industrial CO2 Suppliers and Technology Vendors

• Air Liquide• Air Products• Archer Daniels Midland• GE Oil & Gas• Jupiter Oxygen• Linde• Praxair

Project Developers• Lake Charles Methanol

Environmental NGOs• Center for Carbon Removal• Clean Air Task Force• Natural Resources Defense Council

Labor Unions• AFL-CIO• International Brotherhood of

Boilermakers• International Brotherhood of

Electrical Workers• SMART Transportation Division• United Mine Workers of America• Utility Workers Union of America

Oil Companies• Occidental Petroleum • Core Energy

Observers• Chaparral Energy• Interstate Oil and Gas Compact

Commission• Enhanced Oil Recovery Institute,

University of Wyoming• Mitsubishi Heavy Industries of

America• Tellus Operating Group

NEORI Participants

21

Federal Policy: Section 45Q

22

• H.R. 4622, the Carbon Capture Act (2016)

• Permanent tax credit

• $30/ton for EOR; $30/ton for saline storage

• 150,000 ton threshold for power sector and industrial sector

• S. 3179, the Carbon Capture Utilization and Storage Act (2016)

• 7 year commence-construction period; 12 year tax credit

• $35/ton for EOR and other utilization; $50/ton for saline storage

• 100,000 ton threshold for the industrial sector

Federal Policy: PABs and MLPs

23

• Private Activity Bonds

• The Carbon Capture Improvement Act (2017)

• S. 843: Introduced by Sens. Portman (R-OH) and Bennet (D-CO)

• H.R. 2011: Introduced by Reps. Curbelo (R-FL) and Veasey (D-TX)

• Master Limited Partnerships

• S. 1656; H.R. 2883, the Master Limited Partnerships Parity Act (2016).

State Policies

24

CO2 Utilization: $20M NRG COSIA Carbon X-Prize

25

• Oct. 2016: 27 Semifinalist Teams Announced

Photo by NRG COSIA Carbon X-Prize

• Nov. 2017: 2 $2.5 million Prizes announced

• Mar. 2020: 2 $7.5 million Grand Prizes announced

Construction Materials• Cement and concrete

• Asphalt

• Aggregate• Timber/super hardwood

Fuel• Synthetic (methanol, butanol,

• natural gas, syngas, etc.)

• Micro-algae fuel• Macro-algae fuel

New materials• Carbon fiber

• Carbon nanotubes

and fullerenes• Graphene

Industrial gas & fluids• Enhanced oil recovery

• Enhanced coal bed

methane recovery• Enhanced water recovery

• Semiconductor fabrication

• Power cycles

Polymers• Polyurethene foams

• Polycarbonate (glass replacement)

• Acrylonitrile butadiene styrene• Many more

Agriculture & food• Algae-based food or

animal feed

• Microbial fertilizer• Biochar, bio-pesticides,

bio-cosmetics

Chemicals• Preservatives (formic acid)

• Medicinal

• Antifreeze (ethylene glycol)• Carbon black

• Many moreSource: CO2-based products market analysis by

McKinsey and Company and CO2 Sciences

CO2 Utilization: Global CO2 Initiative Roadmap

26

• Research into potential uses of manmade CO2 is ongoing.

Financing Through Innovative Business Models

27


28

• NET Power demo project (LaPorte, Texas)

Image by NET Power LLC


29

• NRG Petra Nova project (near Houston, Texas)

Infographic by NRG Energy

[email protected]

Center for Carbon Removal // www.centerforcarbonremoval.org // @CarbonRemoval

Center for Carbon Removal

Carbon Removal Policy Options

May 11, 2017

www.centerforcarbonremoval.org

@CarbonRemoval

Center for Carbon Removal // www.centerforcarbonremoval.org // @CarbonRemoval 32

About Us: Center for Carbon Removal

We are a non-partisan, 501c3 organization advancing

fresh solutions to clean up CO2 from the air.

Headquarters:

Oakland, CA

Official academic partner:

Berkeley Energy and Climate

Institute (LBNL & UC Berkeley)

Mission: to catalyze technology, policy, and

financial innovations for atmospheric CO2

capture and storage.

Vision: to see innovators develop and

deploy carbon removal solutions across

forests, agriculture, and industrial CO2

technology that fuel economic growth and

reduce climate risks.


Our approach: Advance a portfolio of complementary carbon removal

solutions, as no “silver bullet” answer exists today.


Carbon removal solutions can expand the climate solution set

Forestry/Ecosystems Agriculture Energy / Manufacturing / Mining

Natural Solutions Technology solutions

Traditional

mitigation

Conservation On farm GHG

emission abatement

Capture: CCS on fossil fuels and other

industrial stationary sources

Storage/use: Enhanced oil recovery, geologic

formations (e.g. saline aquifers)

Expanded

mitigation w/

negative

emissions

potential

Expansion and

enhanced management

Soil carbon

sequestration

Capture: CCS on bioenergy, direct air capture

Storage/use: utilization in long-lasting

materials, geologic storage in underground

reservoirs, and/or accelerated CO2

mineralization


Policies that help conventional CCS approaches can also advance

“renewable CCS” solutions


Carbon removal solutions can build off of existing climate policies

Forestry/Ecosystems Agriculture Energy / Manufacturing / Mining

Natural Solutions Technology solutions

Barriers • Difficult to monitor and verify biological

carbon storage

• Weak incentives to change management

practices to carbon sequestering options

• High costs due to lack of technical and

commercial demonstrations

• Few market incentives compared to fossil

CO2 capture tech.

Expanding

existing

climate

policies

• Farm Bill changes (e.g. increasing

conservation title funding, changing crop

insurance to incentivize carbon

sequestering practices, etc.)

• USFS Fire Borrowing legislation fix

• Clarifying and strengthening the “+” in

REDD+

• Expand and increase 45Q tax incentives

to cover carbon removal approaches

• Vastly increase DOE funding for Fossil

Energy, EERE, Advanced Manufacturing,

Office of Science, and ARPA-E basic and

applied research for carbon removal tech


Examples of existing and proposed carbon removal policies around the

world

Geography Solution Focus Policy Type Description

UK All carbon

removal

Research ~$10M basic research program announced by UK NERC and

BEIS

US Direct air

capture

Research US DOE funded $3M for direct air capture research out of

Fossil Energy Office

US Direct air

capture

Innovation Senators Barrasso and Schatz introduced legislation for $50M

innovation prize for air capture administered by DOE (not

enacted)

US Bioenergy +

CCS

Deployment

incentives

US DOE supported bioethanol + CCS project in Decatur, IL

US Bioenergy +

CCS

Deployment

incentives

Senator Manchin introduced legislation for $100M+ in support

for bioenergy + CCS demonstration (not enacted)

US Soil Carbon Research and

Demonstration

Rep. Huffman’s Healthy Soils and Rangeland Solutions Act

legislation to boost soil carbon on Federal lands (not enacted)

US Biochar Deployment

incentives

WECHAR program introduced in 2009 would have provided

loan guarantees for biochar projects. (not enacted)


The policy grand challenge: we need faster, more ambitious climate action.

How can carbon removal deliver both?

From Rockstrom et. al. in Science

Carbon removal solutions can:

Deliver large-scale negative emissions (the

blue line)

Expand the climate solution advocacy tent (to

build support for achieving the red and grey

lines) by creating economic opportunities for

turning waste CO2 into a valuable resource for

our buildings, consumer goods, and soils that

grow our food and timber

To unlock this potential, we must start

supporting carbon removal solutions today.

Meeting climate commitments

requires unprecedented action:

Richard Mattison, CEO of Trucost and a

member of the EU Sustainable Finance High

Level Expert Group and the Global Advisory

Council of the Oxford Smith School Stranded

Assets Program

How to go about measuring risk and assessing

opportunities?

Clarity for impact investors requires measures of

benefits

Alignment with government policy and mandates

Aligning long term goals of investors with needs of

research

Context is addressable markets and addressable

benefits as cash flow is well in the future

Creating a model to allow innovation - Pharma and

Tech

Financing Carbon InnovationHow to mobilize capital in order to restore the carbon balance

Dr Richard Mattison

Chief Executive Officer, Trucost

11th May 2017

Footer : Never change the footer text on individual slides. Change, turn on or off

Markets are now reacting to climate risks

41

Article 173 of the French

Energy Transition Law:

Mandates climate disclosure

by investors

California passes bill

forcing biggest

pension funds to

divest from coalThe Montreal Pledge, which commits

investors to measuring and disclosing

the carbon footprint of their portfolios

on an annual basis , has attracted 120

signatories representing just over

$10trn in assets under

management.

Dec 2015

Over 200

nations sign

climate

agreement


The Investment and Lending Chain

42


Understanding the Investment Chain

• There is a need to ensure adequate information is provided at each stage of the investment chain

• Investors currently lack adequate information on metrics that would facilitate a flow of capital towards sustainable investments

• The information currently available is not sufficiently robust, forward-looking or relevant enough for investors to use effectively

• Different measures of success, in a sustainability context, need to be able to be aggregated across the investment chain

43


Financial Stability Board recommendations

44

Asset owners should provide GHG emissions, where data are available, associated with each fund or investment strategy

FSB Chair Mark Carney said: “The

disclosure recommendations will give

financial markets the information they

need to manage risks, and seize

opportunities, stemming from climate

change. As a private sector solution to a

market issue, the Task Force has

focused on the practical, material

disclosures investors want and which

all capital-raising companies can

compile.”

14th December 2016


Clear measures of benefits

45

Green Evaluation

http://www.spratings.com/documents/20184/1481001/Green+Evaluation/bbcd37ba-7b4f-4bf9-a980-d04aceeffa6b


DISCLAIMER

Copyright © 2017 S&P Trucost Limited. Redistribution or reproduction in whole or in part is prohibited without written permission.

This document does not constitute an offer of services in jurisdictions where Trucost and its affiliates do not have the necessary licenses. Trucost is not an investment advisor, and Trucost makes no representation regarding the advisability of investing in any company, security, investment fund or other investment vehicle. A decision to invest in any company, security, investment fund or other investment vehicle should not be made in reliance on any of the statements set forth in this document. Prospective investors are advised to make an investment in any company, security, fund or other vehicle only after carefully considering the risks associated with investing in such funds, as detailed in an offering memorandum or similar document that is prepared by or on behalf of the issuer of the investment fund or other investment product or vehicle.

The materials have been prepared solely for informational purposes only based upon information generally available to the public from sources believed to be reliable. No content contained in these materials (including credit-related analyses and data, research, valuation, models, software or other application or output therefrom) or any part thereof (“Content”) may be modified reverse-engineered, reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of Trucost. The Content shall not be used for any unlawful or unauthorized purposes. Trucost, its parent S&P Dow Jones Indices LLC and its third-party data providers and licensors (collectively the “Trucost Parties”) do not guarantee the accuracy, completeness, timeliness or availability of the Content. Trucost Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content. THE CONTENT IS PROVIDED ON AN “AS IS” BASIS. TRUCOST PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall any of the Trucost Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.

The Content does not constitute or form part of any offer, invitation to sell, offer to subscribe for or to purchase any shares or other securities and must not be relied upon in connection with any contract relating to any such matter. ‘Trucost’ is the trading name of S&P Trucost Limited a limited company registered in England company number 3929223 whose registered office is at 20 Canada Square, London E14 5HL, UK.

46

Discussion

Klaus Lackner

[email protected]

Noah Deich

[email protected]

Fatima Ahmad

[email protected]

Richard Mattison

[email protected]

Andy Revkin

[email protected]

mailto:[email protected]





Restoring the Carbon Balance Series

December 15, 2016 - Webinar 1: The Imperative

February 1, 2017 - Webinar 2: The Technologies

May 11, 2017 - Webinar 3: Policies, Financing, Regulations

June 8, 2017 - Webinar 4: How Sustainable is Our Climate Ethos?Register at www.ssfonline.org

1. Follow “Restoring the Carbon Balance” at

www.lightspeedsolutions.org

Register, Watch Recordings, Access Collateral Material

2. Participate in the RCB Discussions

Join: Restoring the Carbon Balance LinkedIn Group

http://www.ssfonline.org/

http://www.lightspeedsolutions.org/

https://www.linkedin.com/groups/6957500



Thank you for attending! A recording of thiswebinar and the slide presentation will be availablesoon in the SSF Archives at www.ssfonline.org.

(and please take the brief exit survey)

http://www.ssfonline.org

Documents

Restoring the Carbon Balance- Session 3: Policies …...Biochar, bio-pesticides, bio-cosmetics Chemicals Preservatives (formic acid) Medicinal Antifreeze (ethylene glycol) Carbon black